R-CALF United Stockgrowers of America Consumers pay near record beef prices

July 10, 2009

Billings, Mont. Ð While meatpacker giant Tyson Fresh Meats (Tyson) continues its legal action to seize the home of Herreid, S.D., rancher Herman Schumacher, consumers pay near record beef prices and cattle ranchers like Schumacher receive below cost-of-production prices for their cattle. In 22 of the past 23 months, U.S. cattle ranchers like Schumacher suffered horrendous losses, which exceeded $300 per head in late 2008 and early 2009 (see Fed Cattle Returns chart below). But, while cattle ranchers reel from low cattle prices, consumers continue to pay at or near record retail prices for beef, with Choice beef prices jumping over the $4 mark in February 2007 and reaching all-time highs in late 2008 and early 2009. According to U.S. Department of Agriculture (USDA) data, in the first quarter of 2009 U.S. cattle ranchers received the smallest share of the consumer's beef dollar in seven years. The price paid to U.S. cattle ranchers in May 2009 for raising a Choice beef steer from birth to about 18 months of age was approximately $1,059. Consumers, however, who purchased the Choice beef after the packer slaughtered the animal, paid about $2,168 for the meat. “In other words, the markup on beef was more than twice the value received by the rancher after he or she had raised the animal for about a year and a half, which means the middlemen Ð the packers and retailers that only held the beef for a matter of days Ð captured unjust profits away from the rancher and exploited the consumer,” pointed out R-CALF USA CEO Bill Bullard. “In May 2009, the producer received only 43 percent of the consumer's beef dollar. “Schumacher dared to do what USDA failed to do for more than a decade,” emphasized Bullard. “He took Tyson to task and filed a lawsuit alleging that Tyson and other packers had taken unlawful advantage of cattle producers by violating the Packers and Stockyards Act (PSA).” Canada, Mexico have no standing to bring complaint R-CALF USA has filed formal comments with the U.S. Trade Representative (USTR) to emphasize that the group believes it is fundamentally contrary to the U.S. Constitution for USTR to agree that foreign governments Ð specifically Canada and Mexico Ð have any standing whatsoever to bring a complaint to the World Trade Organization (WTO) against our constitutionally passed mandatory country-of-origin labeling (COOL) law. “We urge the USTR to take deliberate and decisive steps to quash Canada's and Mexico's attempts to interfere with the United States' sovereign right to inform U.S. consumers Ð using the most accurate and truthful means possible Ð about the origins of the food they purchase for themselves and their families,” said R-CALF USA CEO Bill Bullard. “We agree with USDA (U.S. Department of Agriculture) that our COOL law is consistent with international standards and we believe the complaints by Canada and Mexico against the U.S. COOL law are baseless. Unfortunately, this WTO dispute procedure grants those countries an overly simplified forum to retaliate against U.S. citizens' exercise of their constitutional rights.” The U.S. COOL law imposes no duty or restrictions on any foreign government, nor imposes any limits on the volume or type of commodities that a foreign country may export to the United States. In addition, COOL jurisdiction is exclusively limited to U.S. retailers, as defined exclusively by U.S. law, and subjects all covered commodities marketed by U.S. retailers to identical information requirements, regardless of where the commodities originate.